'We are getting closer to the point when it will pay to be a stockpicker'

We have recently been summing up our overall market view as being characterised by elevated multiples applied to cyclically high earnings.

The reality is that the current opportunity set is very challenged and few investments offer a compelling case. Valuation is a poor predictor of short-term returns (less than three years) and consequently the direction of the market for the time being will continue to be determined largely by flow and type of liquidity.  The marginal buyers of equities for many years have been passive vehicles like ETFs. This has created a world where the acquirer of securities is largely unconcerned by the price paid; only the seller is interested. Thus, at the margin there is a fair wind to secur...